Only if CFOs and CIOs align their requirements and expectations
By Nick Nesbitt
Cloud computing has been a catalyst in opening up much needed dialogue between CIO and CFO. CFOs are being educated on the opportunities and risks associated with IT. CIOs are being provided options with controllable and scalable costs to reduce risk and increase IT departments’ innovation.
Interestingly their roles have flipped in some ways. More often than not it’s now the CFO who has direct oversight of the IT department and IT-related spend, but it is the CIO who receives the constant flow of both technical and educational user needs, hardware and software patches and updates and the changing needs of the overall business.
When it comes to the cloud, CFOs, CIOs and other finance and IT group leaders have divergent attitudes to the cloud, and where those differences trigger the most friction and loss of opportunity, is in methods, processes and timing.
Can finance and IT ever be in-sync where cloud is concerned?
Recent research from Saugatuck Technology shows that IT seems more concerned about existing systems capability than finance is, and is more apprehensive than finance about cloud-based systems falling short in areas like consolidation and regulatory requirements. What the research clearly points out is that both finance and IT need to be reassured that the road to the cloud for finance systems takes into account the need for strong financial consolidation and regulatory capabilities.
While strategic IT-Finance synchronisation is necessary at all times, it is not always a critical problem. The research indicates that IT and finance leaders tend to be well aligned on cloud when it comes to the most important areas. The challenge is how to harmonise what they see, how they see it, how they communicate it and how they put things into place. Interpreting cloud capabilities into ways of improving specific finance process effectiveness will be the first step on a years-long journey not just into, but with, cloud.
It is clear that finance, just like IT, thinks there is need and opportunity for improvement in finance systems and operations. And there is no question that the majority of new finance systems will be cloud-based or cloud-enabled within the next few years. The path – or paths – to cloud will shift somewhat as efforts lead to knowledge and experience leads to improved practices, but every realistic scenario includes hybridised on-premises-plus-multiple-cloud environments.
In order to move finance systems to the cloud as securely, effectively, and quickly as possible, we will need to overcome some fairly significant differences in Finance-IT synchronisation. That both camps acknowledge the need for more sophisticated technology for the standardisation of methods, regulatory compliance and the integration of systems, is already an important first step.
The research shows that overall, while the core IT and finance positions are extremely similar in patterns, IT decision makers have less confidence in current finance management systems, along with greater concern about the consolidation of subsidiaries and the cost of running or upgrading current finance systems. Results also suggest that IT leaders are more positive than Finance leaders about the benefits of Big Data analytics.
Finance is clearly happier with their planning, consolidation and reporting capabilities than IT. So if finance is going to move to a cloud-based system, they need to be sure they don’t compromise on the capabilities of the solution. They need a solution that meets their needs and can easily be extended to address the demands of the future. They absolutely must not compromise on that as they move to the cloud.
Nick Nesbitt is Consulting Services Director at Tagetik UK
Johnson Press Case Study
The challenge & objectives
The multimedia industry is undergoing unprecedented change. Johnston Press, one of the top community media organisations in the United Kingdom and Ireland, is adapting its business strategy and operating model to take full advantage of the evolving landscape. The company’s challenge is to develop and implement best practice tools and methods to better execute its strategy. This includes simplifying and standardising operations by using state-of-the-art technology and processes to improve insights into performance.
Johnston Press needed to better execute its business strategies, ensure that performance against objectives would be monitored and that corrective action could be taken in an efficient and agile manner. This has allowed management to focus on the activities that have the biggest impact on performance.
Deployment in the cloud
At the core of Johnston Press’ initiative was Tagetik’s Performance Management software, first serving as the basis for board-level discussions, then building the high-level plan and allowing for what-if analysis. The software sits on top of the company’s customer and financial database, consolidating all financial and non-financial data in one source and delivering a single version of the truth.
“Tagetik has helped us develop a rhythm in our business cycle,” said Ishfaq Is-haq, Head of Performance Management at Johnston Press. “Cloud-based CPM supports our need to gain
more insight and information from our data, and we’re using it to make decisions that positively
impact our strategic goals.”
The new system has enabled Johnston Press to better execute against strategic objectives and financial targets. Choosing to deploy the CPM software on the cloud improved the effectiveness of financial processes and greatly reduced the number of IT resources and the IT infrastructure needed to adopt and maintain the application.
Results & Benefits
Johnston Press has now unlocked the value of its data. The company can now seamlessly create reports from all databases side by side—both for the end user and the report consumer.
The integration of operational and financial data has enabled the company to do the following:
- Track and analyse daily performance, both to improve operation efficiency and gain powerful insights into customers’ behaviour
- Accelerate strategic planning and budgeting and
- Adjust field tactics to improve overall performance based on its analysis
Johnston Press’ reporting has also become more efficient. The company uses key performance indicators to track data for new, lapsed and returned customers, customer conversions from print to online media and average order value—as well as to measure metrics such as title performance and audiences. In addition, it can compare individual customer spending by product and it can compare spending month to month, as well as month to the same and prior month the previous year.
Johnson Press also uses Microsoft SharePoint and the Tagetik Analytics Portal to give users from both inside and outside the office of finance access to financial and operational reporting and therefore disseminating information to a broader audience for better collaboration. The Tagetik solution has enabled Johnston Press to gain better insights and information from data and make decisions that impact its strategic goals. In short, Tagetik is helping Johnston Press take control of its business operations, running all financial processes and analytics on one unified, cloud-based Financial Performance Platform.
Ishfaq Is-haq added: “The ability to combine operational and financial data means we can track and analyse daily performance to maximize revenue and customer value. We now have the insight to make the right business decision at the right time.”